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The Best Way to Withdraw Cash While Overseas

May 10, 2016
by
Million Mile Secrets Million Mile Secrets

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Million Mile SecretsMillion Mile Secrets Team

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Have you ever come home from a trip abroad and been shocked to see fees on your bank statement? It’s not a fun way to end your vacation!

Most US banks add currency conversion fees of 1% to 3% for using ATMs abroad. And sometimes, there’s an ATM fee of ~$3 to $5 in addition to the foreign exchange fee. These fees can put a dent in your plans for Big Travel with Small Money!

The good news is some checking accounts do NOT charge currency conversion fees. And they’ll even give you a rebate for any ATM charges anywhere in the world!

Foreign Transaction Fees and ATM Fees Are Frustrating! But Some Checking Accounts Don’t Add Them

I’ve made a list of the best checking accounts to use overseas. And I’ll compare these accounts to help you decide which option is best for you!

What’s a Hard Pull and Why Does It Matter?

One thing to consider when opening any account, like a checking, savings, or credit card, is whether the bank does a “hard pull” on your credit report.

Banks access or “pull” your credit report whenever you apply for credit or open certain accounts. These pulls are either “hard” or “soft.”

Hard pulls (or inquiries) happen when you’re applying for credit, like when a bank checks your credit report when you apply for loans, credit cards, or mortgages. And sometimes when you open a bank account. Hard pulls can impact your credit score.

3 Best Checking Accounts to Use Overseas

1. Charles Schwab Checking Account

One of the best free checking accounts to use overseas is the Charles Schwab Checking Account. That’s because you’ll get free, unlimited use of ANY ATM worldwide. And NO foreign transaction fees on purchases!

Your daily transaction limit is $15,000 and you can withdraw $1,000 a day at ATMs.

You’ll also get:

No-fee overdraft protection

No minimum balance requirements

Free checks

Free mobile check deposit

Free bill pay

Chip-and-PIN technology

There are a couple of things to keep in mind, though.

You will receive a hard pull on your credit report when you open this account, which can cause your credit score to temporarily dip. I spoke with 3 representatives at Charles Schwab to confirm this.

You also must open a Charles Schwab investment account. But, it’s free and you don’t have to use it.

Also note they’ll apply the fee rebates to your account once per month, when your statement closes.

I Had to Withdraw Local Currency From an ATM to Buy This Chinese Hot Pot in Hong Kong

I’ve used my Charles Schwab debit card to withdraw cash at ATMs in Mumbai and Hong Kong. And I’m always happy to see the reimbursement for ATM fees on my bank statement!

This account may be a better choice for some because it does NOT require a hard pull on your credit report. That’s good for folks who may soon be applying for mortgages, for example. And who are trying to limit the number of hard inquiries on their credit file.

Emily Needed Rupees to Buy These Beautiful Slippers in Jaipur, India

This would be a great option if you have or are considering the Fidelity 2% Cash Back Visa card. Because you can deposit your cash-back rewards into this account!

3. Summit Checking by Aspiration Bank

When traveling outside the US, the Summit Checking Account is a newer option for folks who want to withdraw cash without fees. Like both the Schwab and Fidelity accounts, you’ll get free use of any ATM anywhere in the world.

BUT, anytime a transaction is made in non-US currency, there’s a 0.2% fee. If the transaction is done in another country, there’s an additional 0.9% fee. So most of your foreign travel charges are going to have a rate of 1.1% – but remember, you’ll be reimbursed for any ATM fees!

The non-US currency 0.2% charge (while negligible) might be important to some folks who make overseas charges while they’re in the US.

Your daily purchase limit is only $2,000. And the daily ATM withdrawal limit is $500.

And they don’t offer overdraft protection. So your purchase or withdrawal will be declined if it exceeds your account balance.

Because Aspiration Bank is still new, they don’t yet have bill pay and mobile deposit options.

Two good things about this account are they have higher checking account interest rates than most other banks (0.25% on balances up to ~$2,500 and 1% on balances above $2,500). And opening an account does NOT require a hard credit inquiry.

Interestingly, they suggest you pay whatever you’d like for their service. So essentially this IS a free account if you decide not to pay for it.

The concept is intriguing, but the other 2 options are better. Because they have bill pay, mobile deposits, and overdraft protection.

Other Checking Account Options

I looked into what fees these banks charge, too. So you wouldn’t have to!

Ally Bank

Ally Bank reimburses up to $10 in ATM fees each statement period and charges 1% in foreign transaction fees.

Bank of America

Bank of America charges an ATM fee of $5 plus 3% of the amount withdrawn and has 3% in foreign transaction fees.

The main difference is Fidelity has a 1% foreign transaction fee and Charles Schwab doesn’t. You’ll also get higher daily spending and ATM withdrawal limits with the Charles Schwab account.

But you WILL get a hard pull on your credit report when applying for the Charles Schwab account. And you won’t when opening the Fidelity account.

The Summit Checking Account is an interesting option. But it’s too new to have all of the account perks I like, such as bill pay and mobile deposit.

Do you have any of these accounts? Share your experience in the comments!

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Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)